Obligation to keep records of all DPP from 1 July 2024

As of 1 July 2024, employers are obliged to keep records of all work performance agreements (WPAs), both insured and uninsured. Employers will have to report a list of all workers employed on a DPP, including their income, on a monthly basis on the "DPP Statement" form. This will be submitted by the 20th of the following month, i.e. for the first time for July by 20 August 2024.

Late last year, as part of the consolidation package, legislators made major changes to the insurance and tax rules for income from activities carried out on the basis of a FTC. The aim was to prevent the chaining of uninsured agreements, where some employees realise income in the order of tens of thousands of crowns without paying insurance premiums. However, the rules set by the legislators met with considerable opposition from employers and the professional public and were therefore subsequently modified by an amendment (amendments to the Parliamentary Question 570). The amended rules for the payment of insurance premiums should thus apply only from 1 January 2025, but the obligation to register employees on the statutory pension scheme from the consolidation package has been retained and will come into force on 1 July 2024. The registration will enable the authorities to collect the data needed to administer the new statutory pension scheme. The CSSA should also communicate the data to health insurance companies.

Employers who employ workers on a temporary employment contract will therefore be obliged to keep a record of such workers and electronically communicate this information to the local social security administration by the 20th day of the following month via the Statement of Income Charged by the Employer to Employees Employed on the Basis of an Agreement for the Performance of Work (SIPP or Statement of SIPP). Entry into employment and termination of employment of persons working under a VPA will also be notified via the VPA Statement. Thus, insured persons of the DPP will no longer need to be separately notified by means of the 'Notification of entry into or termination of employment'.

Employees who started before 1 July 2024 will have to be registered no later than 20 August 2024 (in the first DPP Statement) if the DPP continues in July.

Non-registered employers (so far they have only employed "uninsured" contract workers) must register in the Employers' Register by 30 July 2024. They will then be assigned a variable symbol and, similarly to already registered employers, they will send their first FTC Statement by 20 August 2024.

The CSSA has published the data sentences for the new form on its website so that employers and their software suppliers can adjust their systems in time. In particular, the information reported in the electronically filed DPP Statement will be:
  • the month and year for which the statement is submitted;
  • the name, ID number and variable symbol of the employer, the code of the locally competent Social Security Office or Social Insurance Office;
  • data on each person working on a FTE - name, surname, birth number, date and place of birth, sex, health insurance company code, citizenship, employment from and until, type of FTE, income accounted for.
 A recapitulation of the rules for insurance premiums and tax on income from the DPP:
  • from 1 July 2024 - obligation to register all FTEs and submit the monthly FTE Report;
  • until 31 December 2024 - the regime of insurance premiums and taxation remains unchanged, i.e. from remuneration up to CZK 10 thousand to CZK 10 thousand. No insurance premiums are deducted from the remuneration of a single employer and withholding tax is applied in case of unsigned declaration of the taxpayer;
  • from 1 January 2025 - regime:
    • "notified" agreements, i.e. the first employer who notifies the DPP applies the limit of the applicable amount for participation in the premium up to ca. The employer applies withholding tax on the remuneration from the agreement if the taxpayer's declaration is not signed;
    • "other" agreements - limit of CZK 4,000 per month, small-scale employment scheme, i.e. up to the applicable amount, no insurance contributions are paid and withholding tax is applied. Above the limit, insurance premiums are paid and advance tax is withheld.

We recommend that you pay early attention to setting up your company's processes in order to comply with the new obligation to record and file the DPP Statement.

Autor: Monika Lodrová